Thin buffer | Inquirer Opinion

Thin buffer

Thousands of dirt-poor coconut farmers went to their graves before the Supreme Court unanimously ruled Tuesday: Stocks that tycoon Eduardo “Danding” Cojuangco Jr. claims as “commission,” in the coconut levy scam, belong to the government. They’re for farmers from whom they were extorted.

The ruling zeroes in on stocks that Cojuangco would pocket after he negotiated the purchase of First United Bank by the Philippine Coconut Authority. FUB’s shingle was later repainted United Coconut Planters Bank. It monopolized the deposit of levy funds through Ferdinand Marcos’ Presidential Decree No. 276.


That decreed “coco levies” were owned by cronies “in their private capacities.” Taxes became individual loot, by the stroke of a dictator’s pen. If PD 276 is not scrubbed as unconstitutional, “Marcos found a legal and valid way to steal,” wrote then Inquirer columnist Antonio Carpio. As a Supreme Court justice today, Carpio finds himself vindicated, albeit fragment by troubled fragment.

The Supreme Court led by Chief Justice Ma. Lourdes Sereno ruled that Cojuangco had received public assets in UCPB shares. They were valued P10.8 million in 1975, paid by coco levy funds. Cojuangco admitted that PCA picked up the tab for the 72-percent option shares. The Court affirmed the Sandiganbayan order to nullify transfer to Cojuangco, saying he “cannot stand to benefit by receiving, in his private capacity, 7.2 percent of FUB shares.” That’d violate “the constitutional caveat that public funds can only be used for public purpose,” the Court added. Basta. No further reconsideration. That’s final.


“We are not final because we are infallible,” US Supreme Court Justice Robert Jackson once wrote. “But [we are] infallible only because we are final.” But that is what the Supreme Court led by Chief Justice Renato Corona repeatedly ignored in the coconut levy case. It flip-flopped four times on the case after the initial “final” ruling.

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The government plans to sell the P14.4-billion sequestered shares in UCPB, says Philippine Deposit Insurance Corp. president Valentin Araneta. Proceeds will go to a trust fund that the government will put up for coconut farmers. After the Marcos regime fleeced UCPB, the government had to rescue it with a P20-billion loan that still has to run until 2018.

In August 1998, Ricardo Cardinal Vidal presented to President Joseph Estrada a Bishops-Businessmen’s Conference memo. “Abuse of state power” wrung those monies from small, impoverished coconut farmers, it said. They should be returned.

Erap made noises about helping. But just before People Power booted him out in 2001, he signed Executive Orders 313 and 315. “Erap delivered the levy—estimated at over P100 billion then—to cronies,” the Sun Star noted. “It was grand larceny that needed ever-larger doses of hypocrisy.”

Flash back to the brutal November 2003 teetering-on-the-edge constitutional crisis. The Supreme Court led by Chief Justice Hilario Davide had earlier ruled that the coconut levy funds were public funds. A furious Cojuangco unleashed a “Brat Pack” of Nationalist People’s Coalition congressmen to impeach Davide.

Davide defied gangland culture “so often he became a big threat,” the Inquirer’s Randy David observed. “Now, Davide is being taught a lesson, by the heirs of those who always imagined themselves to be the real lords in this little corner of the world—the Brat Pack.”


“Is this a coalition of cretins?” snapped then Rep. Teodoro Locsin Jr. They had initiated an impeachment move on the unimpeachable ground of failure to give cost-of-living allowance. “The conundrum of the House is: how to climb out of the sh-thole in which a third of its members descended with such stealth…” The House rejected the bid.

Shares owned by 14 companies bought with the levy are “owned by the government,” Justice Teresita Leonardo de Castro and the Sandiganbayan ruled in May 2004. “[They are] held in trust for all coconut farmers.”

Indeed, “coconut levy funds are prima facie public funds,” the Supreme Court unequivocally stated for the first time in “Republic v. Cocofed.” Penned by then Chief Justice Artemio Panganiban, the decision allowed sequestered shares to be voted by the Presidential Commission on Good Government, “pending the final determination of who were their legal owners.” Thus, Cojuangco surrendered control of a fleeced UCPB to the government.

Sure, the coconut levy funds were dipped into for the purchase of San Miguel Corp. shares, said the Corona Supreme Court. Nonetheless, Cojuangco “legally acquired the 20 percent block.” He pocketed 16.2 million SMC shares, jacking up his stake in the corporation to P37 billion.

That’s “the joke of the century,” snapped then Justice Conchita Carpio Morales. Cojuangco “used for his personal benefit the very same funds entrusted to him,” Morales’ dissenting opinion states. “[These] were released to him through illegal and improper machination of loan transactions. [His] contravention of corporation laws … indicates a clear violation of fiduciary duty…”

Then Associate Justice Sereno agreed. Her scathing dissent said: Cojuangco’s stake in SMC was “built on the sweat of coconut farmers…” By a scheme of “corporate layering and multilevel loan transactions,” he diverted public funds. Chief Justice Corona, meanwhile, had been impeached.

“Men of good will are often all that is between us and the devil,” a proverb says. Indeed, reforms by President Aquino and a renewed Supreme Court would reduce the number of premature graves for robbed coconut farmers.

They should. Levy-impoverished farmers “are not a race of other creatures bound on other journeys,” to crib a line from Charles Dickens. “They are our fellow travelers to the grave.”

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E-mail: [email protected]

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TAGS: Coconut farmers, coconut levy, column, Eduardo ‘danding’ cojuangco jr., Juan L. Mercado, Supreme Court, UCPB
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